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Letter to the Editor
This article originally appeared in the August 2004 Issue of INSIGHT
©2004 Collision Repair Industry INSIGHT All Rights Reserved
Akzo Nobel to Cut Jobs at Auto Refinishes Unit
DuPont Performance Coatings Announces Management Changes
AutoNation Preliminary Q2 Results Below Expectations
PPG Names Outcalt General Manager of Insurance Services
Copart CEO Willis J. Johnson Named Winner of Ernst & Young Entrepreneur of the Year 2004 Award
CCC Introduces CCC Accumark Reinspection
CEI’s IT Group Named Microsoft Certified Partner
Insurance Auto Auctions Opens Greenfield Facility in El Paso, Texas
Canadian Collision Industry Forum Halifax Report
Russell Thrall III Joins I-CAR Education Foundation as Manager of Technical Services
PPG Honors Eleven Companies as Excellent Suppliers
Mentor of the Year: Nominations Requested by Mentors at Work for New Award to be Presented at NACE
Copart Enters Technology Contracts with Wholesale Vehicle Auction Companies
PPG's Coatings Segment Spurs Record Q2 Sales
DuPont Performance Coatings Again Receives Southeast Toyota Award of Excellence
INDUSTRY UPDATE
Dutch chemical group Akzo Nobel NV has announced that it will restructure its car refinishes unit, cutting about 600 jobs in the process or ten percent of the division's workforce.
The world's biggest maker of coatings, with brands such as Sikkens and Lesonal, said it would carry out the restructure during 2004-2006 and its focus would be on realigning the business with changing market conditions.
"Akzo Nobel Car Refinishes intends to limit forced redundancies as much as possible," the company said.
The unit supplies paint, decals, services and software for car repair, commercial vehicle and automotive markets.
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DuPont Performance Coat-ings has announced several changes in its marketing and sales management. The changes take effect June 30.
Harry Hall, East Region sales manager, has been named marketing manager for Refinish Americas, reporting to Raymond Anderson, director of Refinish Americas.
Hall replaces Richard Morecz, who has elected to retire from DuPont after 35 years of service. Donna Alves, West Region sales manager, will replace Hall.
Curt Miller, formerly district sales manager, Texas District, replaces Alves. Moving into Miller’s position is Bruce Cureton, market sales manager, Detroit District. He will report to Miller.
Timothy Carmack, production shop/Nason Brand manager, is appointed U.S. distribution manager, Refinish. He replaces Gregg White, who has elected to retire from DuPont after 24 years of service.
Replacing Carmack is Kevin Brown, who had been market sales manager in the Southeast District. Jason Lowry, formerly business development manager, Advanced Coatings Systems, replaces Brown. He will report to Gene Ivey, Southeast District sales manager.
Alves, Miller, Carmack and Brown will report to John Gallagher, U.S. sales manager.
AutoNation, Inc., America's largest automotive retailer, has announced preliminary earnings results for the second quarter ended June 30, 2004.
The company's earnings per share (EPS) from continuing operations for the second quarter are expected to be in the range of $0.34 to $0.35, below the anticipated EPS range of $0.38 to $0.40 previously provided by the company in April 2004.
"A number of factors directly impacted our second quarter earnings," said Mike Jackson, Chairman and Chief Executive Officer of AutoNation. "Our cost structure was targeted for vehicle sales volume levels that did not materialize, particularly in June, with significant declines in sales of Ford and General Motors products. Low volume when combined with high inventories also caused a gross margin decline in our new vehicle business."
Looking ahead, Jackson said, "Although the second quarter earnings were disappointing, our cash flow is strong and our strategy sound. However, in light of the second quarter results and the difficult new vehicle retail environment that we are operating in, we now anticipate 2004 EPS from continuing operations in the range of $1.35 to $1.40."
PPG Industries has named John R. Outcalt general manager of insurance and services, assuming responsibility for the company's LYNX Services claims management, GTS software and GLAXIS electronic commerce businesses.
PPG insurance and services is part of the PPG automotive aftermarket business unit that includes automotive refinish and auto replacement glass.
Outcalt previously was director of North American sales for PPG's automotive refinish business.
"John and I have worked together closely during his tenure in PPG's refinish business, and I know he understands the automotive repair industry," said Garry Goudy, vice president, automotive aftermarket. "John is familiar with the challenges and opportunities facing body shops, whether sole proprietorships or regional chains of facilities. His experience in the collision repair industry fits well with the automotive replacement glass marketplace, and I am confident that we will deliver additional value to our insurance and end-user customers under John's leadership."
Outcalt joined PPG in 1983 as marketing services manager for the Chrysler account, part of the automotive coatings business. He progressed through additional marketing, marketing services, technical, sales and management positions within automotive coatings until 1996, when he joined the automotive refinish team as director of network sales. He served as director of collision center operations before assuming his most recent role in 1997.
PPG's insurance and services unit comprises an array of businesses - LYNX Services, GTS Services and GLAXIS - working together to offer automotive claims management, e-commerce capabilities and call center services to meet the needs of policyholders, insurance companies and auto service providers.
Copart, Inc., a national salvage auto auctions company, has announced that its Chairman and CEO, Willis J. Johnson, is the recipient of the prestigious 2004 Ernst & Young Entrepreneur of the Year 2004 Award in the Consumer & Business Services and Products category for Northern California.
Johnson was selected from 24 finalists in Northern California by an independent panel of judges comprised of local community and business leaders and announced at an award banquet on June 18th, 2004 at the Fairmont San Francisco.
"I wish to thank Ernst & Young for nominating me for this award," commented Johnson, "and thank the judges for choosing me as the recipient from among a worthy group of entrepreneurs."
"I am proud to be recognized, and I thank the management team and all the employees of Copart who have contributed toward the success of our company," he continued. "When I started in business over 40 years ago, I had no idea that I would be guiding a company with the reach, ambition, and promise for the future possessed by Copart. The outstanding service offered by Copart reaches all corners of the globe, and with the development of VB(2), Copart's propriety internet auction technology, I believe the opportunity to expand our reach beyond the salvage vehicle industry is significant."
"It's exciting to look back over the last 10 years, to the year Copart went public, and think about where we've come from and where we are today," said Johnson. "I am proud that Copart has been the leader in advancing our industry from the days of mom and pop local operators utilizing primitive technology, to an industry that is today technology centric. We truly have the largest national footprint and utilize state-of-the-art technology that has given us a global reach like never before. I'm anxious to see where the future takes us."
Previous winners of this award include Sergey Brin and Larry Page, Co-Founders of Google; Larry Ellison, Founder of Oracle Corporation; Scott McNealy, Co-Founder of Sun Micro Systems; Gordon Moore and Bob Noyce, Co-Founders of Intel; and Pierre Omidyar, Founder of eBay.
Johnson is eligible for consideration for the Entrepreneur of the Year 2004 national program. Winners in several national categories, as well as the Overall National Ernst & Young Entrepreneur Of The Year, will be announced at the annual awards gala in Palm Springs, CA in November.
Copart, founded in 1982, operates 107 facilities in the United States and Canada.
CCC Information Services Inc. has released the company's newest and most powerful reinspection product, CCC Accumark(TM) Reinspection.
Designed to create a more efficient reinspection process through the management of company-specified appraisal procedures, CCC Accumark Reinspection can also track and confirm company-recommended changes.
Insurers using CCC Accumark Reinspection can, according to a company press release, quickly identify and prioritize claims for reinspection. CCC Accumark Reinspection automatically reviews each line of an estimate within a customized framework of company-established rules.
Because the reinspector can edit and "highlight" any estimate line for clarity, insurers will be in a position to reduce the time spent on each claim, increase staff productivity and write more comprehensive estimates.
"Even though a majority of today's estimates are handled electronically, there hasn't been a systematic way to reinspect appraisals or estimates coming from a variety of sources," said Jim Dickens, senior vice president, product management and marketing for CCC. "Any estimate that follows the CEICA EMS standard can be reinspected using CCC Accumark Reinspection. Each estimate line is then compared to company established rules, returning an in-depth audit of the appraisal.
"Insurers also need to confirm that their recommended changes are occurring," added Dickens. "While our first generation of products helped to modernize the reinspection process, 40 percent of the reinspected estimates (where a reinspection was requested) were not followed up by a supplement from the estimator. With CCC Accumark Reinspection, insurers have the functionality to track and trace the implementation of changes back to the appraisal source."
Built on CCC's open technology, CCC Accumark Reinspection is easily integrated with CCC's core products, including CCC Pathways Estimating Solution and CCC Autoverse Claim Management.
By integrating CCC Accumark with Pathways, users of the estimating system have access to one, fully loaded solution for estimating, reinspection and audit activities. The integration of CCC Accumark with CCC Autoverse Claim Management provides non-Pathways users with the benefits of a leading reinspection solution to use with their current EMS-based estimating systems.
CCC Accumark Reinspection promises increased flexibility, providing both on- and off-line access to digital images, estimates, supplements, audit reports, notes and administrative claim information so the necessary claim reinspection details can be accessible regardless of whether the user is logged-on. Appraisal totals are automatically recalculated while conducting a reinspection using CCC Accumark Reinspection, saving the estimator re-keying time.
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The CEI Group Inc recently achieved rank as a Microsoft Certified Partner.
Requirements necessary for this status include having at least two Microsoft Certified Professionals at the company as well as having at least one packaged software solution that has been tested and approved by Microsoft.
Certification recognizes CEI’s efforts to constantly learn and train in the latest information technologies.
“Our IT group is operating at the level of many top consulting organizations,” said Tom Osborne, senior business and applications manager. “Certification ascertains that our IT staff is professional, and that we take our profession seriously. We have seven members—almost a one-in-four ratio—in the IT department that have either full or partial certification in various Microsoft competencies.”
As a Microsoft Certified Partner, CEI is entitled to Microsoft software products as well as a number of support options that are not available to non-partners.
CEI is a provider of technology-enhanced vehicle accident and risk management services, serving self-insured commercial, institutional and governmental fleets directly and through its alliances with fleet leasing companies.
Insurance Auto Auctions, Inc. (IAA) has opened a new greenfield facility in El Paso, Texas. The new eight-acre facility will provide additional coverage in the state of Texas, leveraging branches in Austin, Corpus Christi, Dallas/Ft. Worth, Houston, Longview and San Antonio.
Due to its strategic location in the western tip of Texas, the new El Paso location will also provide support for the Company's Albuquerque, New Mexico branch by serving the southern third of New Mexico.
IAA's new IT system has been installed in the new location, allowing the operation to immediately leverage its reporting and processing capabilities.
"We opened this branch specifically to provide additional service to our existing customers in Texas and New Mexico, and with its addition the El Paso facility helps us solidify this key state and the region overall," said Tom O'Brien, CEO of IAA. "This location cost effectively leverages our existing locations in Texas and New Mexico and we will continue to look for additional opportunities that will allow us to better serve our existing and potential customers in the area. We look forward to updating our customers and shareholders on the progress of our growth strategy as we move forward."
Insurance Auto Auctions, Inc., founded in 1982, currently has 76 salvage auction sites across the United States.
The Canadian Collision Industry Forum (CCIF) made a welcome return to Halifax on June 19th, displaying the growth and maturity it has developed since its last stop there four years ago. Participants from the local area and across the country enjoyed a full day of presentations and breakout groups on cycle time reduction, education and training and “recycling software.”
A highlight of the meeting was the session organized by the Parts and Materials Committee on the software available to collision repairers for locating, qualifying and costing recycled parts.
Representatives from ADP, Allied Information Canada, Car-Part.com, Mitchell, NuGen IT and Pro Auto Recyclers/QRP Canada, presented their software solutions and later ran demonstrations during the networking breaks. They also participated in a lively breakout group at which they described how their systems impact the collision repairer’s service levels and profitability.
The Parts and Materials Committee reported on its progress in developing “Best Practice” guidelines for the handling of parts between all stakeholders. It noted the increasing use of systems automation between partners and outlined its progress on the standardization of parts condition ratings.
The Cycle Time Committee reported on its poll of collision repairers and insurers on the definition and measurement of cycle time. Fully 94 percent of collision repairers claimed to track cycle time, with most of them defining the period as “keys to keys.” Use of a computer management or scheduling system was reported by 61 percent of shops.
The reasons for poor cycle times included:
- Communications between collision repairer and insurer
- Inspections and re-inspections
- Internal issues
- Parts availability and choice.
In its goal to develop “Best Practice”, the committee will assess the validity of the different ways of measuring cycle time, define the accountability of each stakeholder in the various stages and identify the tools available to help reduce cycle times.
CCIF Halifax was attended by over 100 collision repairers, insurers, suppliers, recyclers trainers, service providers and trade associations from nearly every province in Canada.
For many it was a great networking day and an opportunity to share and pick up some useful ideas. For others it was a day of defining action steps and identifying how they would be carried out. For all it was a further step in building a more united and integrated industry for the benefit of all stakeholders.
CCIF enjoys tremendous support from individual Maple Leaf Sponsors and the corporate sponsors who enable the Forum to take place. It would like to recognize and thank ADP Claims Services, Akzo Nobel, Allied Information Canada, AutoChoice Parts & Paints, Auto Parts Plus/Auto Plus, Auto-Quote Management Systems, BASF, Bodyshop Magazine, Budget Rent A Car, Canadian Underwriter magazine, Car-Part.com. CARQUEST Canada, CARSTAR, CertifiedFirst Network, Colli-sion Solutions Network, Discount Car and Truck Rentals, DuPont Performance Coatings, Enterprise Rent A Car, Mitchell International, 3M Canada, NAPA-CMAX, Norton, NuGen I.T., Pro Auto Recyclers, and Sherwin-Williams.
CCIF Montreal is next on the agenda and will take place at the Holiday Inn Midtown on Saturday, October 16th.
Russell Thrall III has been named the I-CAR Education Foundation’s new Manager of Technical Services to take effect July 12.
In this newly created position, Thrall will be responsible for technical product development and will assist Ron Ray, Executive Director of the Foundation, in developing inter-industry partnerships.
"We’re excited to have Russell joining the staff of the Foundation," said Ray. "Russell’s technical background and years of industry experience will prove invaluable as the Foundation expands its existing programs and launches new initiatives to promote collision repair industry careers and entry-level training opportunities."
"I am extremely excited to have the opportunity to work with the Education Foundation," Thrall said. "One of the single biggest challenges facing this industry is the shortage of qualified entry-level technicians. The Foundation plays an important role in finding solutions to alleviate the shortage- by developing programs that encourage young people to actively consider careers in this industry. I look forward to the rewarding challenges ahead of us."
Thrall, a second-generation collision repairer, has been involved in the collision repair industry his entire life. Starting as a clean-up person in body repair facilities owned and managed by his father, Thrall has experienced the industry from the bottom up. By the age of 14, Thrall began working part-time as a technician in a shop close to home, and by the time he was 17, he was promoted to assistant manager.
After more than 10 years in the shop environment, Thrall joined the staff of Chilton's Automotive Body Repair News (ABRN) in 1991 as technical editor. In 1992, he was promoted to senior editor, responsible for maintaining the content of ABRN editorial and representing the magazine at industry events nationwide.
In 1993, Thrall left ABRN to become the Editor at Collision Repair Industry INSIGHT. Thrall returned to the staff of ABRN as Editor in Chief in June 2000 and served in that position until July 2, 2004.
A frequent speaker at industry events including the Collision Industry Conference (CIC), NACE, and numerous other local and regional events, Thrall’s industry involvement also includes serving as co-chairman of the Collision Industry Conference Information Technology committee, a position he has held for over ten years. He is also currently serving on the Board of Directors of the National Auto Body Council (NABC).
Past committee involvement includes the CIC Industry Action Network environmental committee, the I-CAR Education Foundation’s Industry Advisory Committee and the CIC Data Issues Task Force.
Thrall was the recipient of the NABC President’s Award in 2000 and was inducted into the prestigious Collision Repair Industry Hall of Eagles in December 2002.
INSIGHT wishes happiness and great success for Russell in his new position!
PPG Industries has presented 11 Excellent Supplier Awards for superior performance in 2003.
Award criteria included product quality, delivery, documentation, innovation, responsiveness, continuous improvement and participation in PPG's Supplier Added Value Effort ($AVE) program. The companies earning the 2003 Excellent Supplier Award, and the products and services they provide, are:
- Arrow Uniform, based in Taylor, Mich., provides uniform and mat services.
- Bayer Polymers LLC, Pittsburgh, supplies isocyanates and other raw materials for PPG's automotive refinish, industrial, automotive original equipment and architectural coatings businesses.
- Consolidated Electrical Distributors, Westlake Village, Calif., provides electrical supplies and components.
- Combined Transport, Central Point, Ore., supplies specialized truckload transportation for PPG's U.S. flat glass businesses.
- Executive Relocation, Chicago, provides relocation services.
- J.B. Hunt Dedicated Services, Lowell, Ark., supplies transportation services.
- KW Plastics, Troy, Ala., supplies 1-gallon composite paint cans..
- MAMOR, Grezzago, Italy, provides disposable totes to PPG's European businesses.
- Rohm, Darmstadt, Germany, supplies methacrylates to PPG's automotive and packaging coatings businesses in Europe.
- Thioplast Chemicals, Greiz, Germany, supplies liquid polysulfide polymers.
- Wolf Container & Chemical, Sewickley, Pa., supplies clay and calcium carbonate to PPG's U.S. architectural, industrial and automotive original equipment and refinish coatings businesses.
Mentors at Work, LLC, has announced the creation of a new award to recognize the vital work technicians who “mentor” others do for this industry. The “Mentor Of The Year” award will be presented to the individual who has shown exceptional skill and prowess in teaching and training new technician talent for the collision repair industry. The award will be presented at this year’s NACE, November 2nd during the Collision Industry Night of Achievement.
Nomination forms may be requested from Mentors At Work by calling 630-762-0614 or via e-mail at info@mentorsatwork.com and are due by September 17th.
“... Mentors throughout the country will play a crucial role in developing the workforce of tomorrow for shops that empower them to do so,” said Mark Claypool, President and CEO of Mentors at Work. “For three and a half years we have been working closely with shops to address the skilled worker shortage issue, and many shop mentors have blown us away with their people skills, teaching skills and dedication to this industry and their employers.”
“This dedication and the above and beyond the normal call of duty efforts deserve everyone’s appreciation for the positive impact these initiatives will have on our long-term ability to fix cars right and in a timely manner,” added Claypool.
Copart, Inc. has entered into contracts with 30 wholesale vehicle auctions, including six affiliated companies, to provide its proprietary VB2 auction technology for use in their auction process. Copart anticipates that these wholesale vehicle auctions will begin utilizing VB2 by the end of 2004.
VB2 is proprietary technology that allows buyers anywhere in the world to locate a desired vehicle, preview the vehicle through digital images and technical data and participate in a real-time virtual auction via the Internet. Copart believes that, in the salvage vehicle auction industry, VB2 has reduced buyers' costs by eliminating the need to travel and gather at an auction site, has expanded each buyer's geographic area of operation by allowing participation in multiple virtual auctions simultaneously, and has increased the returns realized by sellers by expanding the size of the bidder pool.
"VB2 has made the entire salvage vehicle auction industry more efficient," commented Willis J. Johnson, Copart's Chairman and CEO, "And our intent is to have the same effect on the wholesale vehicle auction industry."
The wholesale vehicle auction industry processes and sells an estimated 10 to 11 million vehicles annually, supplied primarily by manufacturers, fleet and leasing companies, banks, car rental companies, and car dealers.
"This opens up a whole new industry to Copart, one that is substantially larger than the salvage vehicle industry. We also believe that there is opportunity for VB2 to be applied to other industries," added Johnson.
Copart cautions, however, that VB2 has not been proven in the wholesale vehicle auction industry nor has it generated revenue at this time.
In other company news, Copart has acquired a salvage facility in Anchorage, Alaska. The addition of the Alaska site brings Copart's total number of locations to 107 throughout 42 U.S. states and Canada.
PPG Industries has reported second quarter net income of $183 million, or $1.06 a share, which includes aftertax charges of $3 million, or 2 cents a share, reflecting the previously announced decision to begin expensing stock options in 2004, and $6 million, or 3 cents a share, to reflect the net increase in the current value of the company's obligation under its asbestos settlement agreement reported in May 2002. Sales for the second quarter of 2004 were $2.43 billion, a PPG record for any quarter.
That compares with second quarter 2003 net income of $152 million, or 89 cents a share, which includes aftertax charges of $7 million, or four cents a share, to reflect the net increase in the value of the company's obligation under the asbestos settlement, and $2 million, or one cent a share, related to restructuring. Sales for the quarter were $2.30 billion.
For the first six months of 2004, PPG recorded net income of $298 million, or $1.73 a share, which includes aftertax charges of $7 million, or four cents a share, to reflect expensing stock options in 2004, and $9 million, or five cents a share, to reflect the increase in the value of the company's obligation under the asbestos settlement. Sales for the first half of 2004 were $4.69 billion.
For the first six months of 2003, PPG recorded net income of $230 million, or $1.35 a share, which includes aftertax charges of $6 million, or three cents a share, for the cumulative effect of a required change in the accounting for asset retirement obligations; $10 million, or six cents a share, to reflect the net increase in the value of the company's obligation under the asbestos settlement; and $2 million, or one cent a share, for restructuring. Sales for the first half of 2003 were $4.38 billion.
"Our strong performance in the quarter reflects the benefits of a growing economy, and more important, the consistent application of strategies that have generated profitable growth in our coatings segment, the continued success of our optical products and our relentless focus on reducing costs," said Raymond W. LeBoeuf, chairman and chief executive officer. "Although we expect the overall economy to continue growing, there will not be consistency across all sectors of the economy. The overall expansion, however, continues."
Coatings sales were $1.35 billion, a PPG record for any quarter, up $105 million, or eight percent. The growth was driven by stronger volumes in the architectural, industrial, automotive OEM, aerospace and automotive refinish businesses and the strengthening of foreign currencies, offset by slightly lower prices in the automotive OEM business.
Operating earnings were $223 million, also a record for any quarter, up $18 million because of increased volumes and improved manufacturing efficiencies, which more than offset additional selling expenses in the architectural business, the impact of cost inflation and lower selling prices.
Glass sales increased $10 million, or two percent, as stronger volumes in the fiber glass, flat glass and automotive OEM businesses more than offset lower selling prices and automotive replacement glass volumes. Operating earnings were up $40 million as improved manufacturing efficiencies, in-creased volumes, and higher other income more than offset lower selling prices and cost inflation.
For the second year in a row, and the sixth time in the past eight years, DuPont Performance Coatings (DPC) and its distributor, FinishMaster, have received a “Business Partner Award of Excellence” from Southeast Toyota Distributors LLC.
DPC was recognized for its work with the Southeast Toyota Processing Facilities in Jacksonville, Fla., and Commerce, Ga. Thousands of vehicles pass through the facilities annually, receiving upgrades that include two-tone paint, painting of accessories to match OEM colors, leather seating, and custom wheels and tires.
The award is based on quality of product, warranty rate, commitment to lead time, response time to problems, and level of total quality management. Out of more than 100 suppliers, only 13 were honored with the Business Partner Award at the annual banquet, held in St. Augustine, Florida, on June 3.
Members of the DPC team are: Al Salas, district sales manager; Joe Grillo, color quality coordinator; and Matt Hayes and Trevor Wiggins, sales representatives. FinishMaster members were: Charles Lewis, regional sales manager; Billy Edenfield, sales representative; and Tom Burgess, operations manager.
“We are honored by this award,” said Salas. “Southeast Toyota has a well-deserved reputation for quality and customer satisfaction. They demand the very best from their suppliers, and their professionalism and integrity make it a pleasure to work with them.”
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